Macro-Headlines Can Be Confusing

By Seth Golden (@SethCL on X) - A financial market resource for the every-day investor and trader

Lennart Heim is the Compute Team Lead at RAND’s Technology and Security Policy Center and a Professor of Policy Analysis at RAND School of Public Policy.

China will likely match U.S. AI model capabilities this year, triggering inevitable concerns about America’s technological edge. However, this snapshot comparison misses the bigger picture. While Chinese models close the gap on benchmarks, the U.S. maintains an advantage in total compute capacity — owning far more, and more advanced, AI chips. This compute advantage, if leveraged strategically, will play an extraordinary role in driving economic transformation, securing technological leadership, and shaping the global AI ecosystem. U.S. policymakers risk squandering this edge by focusing on the wrong metrics and overreacting to predictable Chinese advancements.